INCREASE IN TAXATION.

Western Star, 1 March 1938, Page 2

INCREASE IN TAXATION.

MR SAVAGE MAKES EXPLANATION £18,000,000 USED, FOR SOCIAL SERVICES. WELLINGTON, February 27. Claiming that more than half tho taxation revenue of New Zealand was handed back to the; people,, the Prime Minister (the Rt. Hon M. J. Savage) in his address at the Labour Party’s picnic at Featherston on Saturday, s aid that he was going to be quite frank- about taxation. As the result of better times the taxation revenue last year increased by £5,500,000 to the record sum of £31,000,COO, which admittedly was “a mighty lot of money,” but the test, wa. s what this big revenue was used for. To begin with, £11,000,000 went to pay the annual charges of the national .debt, a legacy from previous Governments. The sum of £18,000,000 was paid for social services, including health, education, pensions, and unemployment relief. Thus, he declared, more than half the taxation was handed straight back to the people. Approximately £3,000,000 was spent on highways, and the rest of the money went for essential repairs, defence, and administration.

It wa s true that taxation was less under what h© termgd the “depression Government,” but at that time incomes and wage s wer© much lower, atnd social services were shamefully inadequate. “We hear a lot about high taxation,” continued the Prime Minister. “The test is: What have people left after paying the taxation ? Since 1935 the aggregate private income ha s increased by at least £37,000,000, while taxation revenue ha s gone up £10,000,000. The extra money left for the people i s £27,000,000, and the surplus appears to be a good dividend. “luxation to provide social services is part of the Government’s policy of redistributing, the national income,’” said the Prime Minister, with emphasis. “Can New Zealand afford its social services on the present improved scale ? I say ‘Yes,’ and I defy anyone to disprove it,”

He asked critics to look at tlie nation’s resources and the expenditure on luxuries. It had been said that the Government was in too great a hurry to make conditions better for the people. Surely that wa ? a good fault. They began on the quick elimination, of social miseiy, increasing wage s and pensions, extending the pensions scheme to 10,000 invalid,, who formerly were among the forgotten people, and lifting the unemployed out of starvation. They had established national control of the public credit, and remedied the main fundamental defeotj. in our financial system. “It would take hours to give all the Government’s achievement i u detail,” said Mr Savage, concluding his taxation references, “hut the quickest and surest way to realize their effect and value is to look back at the widespread misery in New Zealand a lew years ago and then study the broad of real prosperity to-day.”